Trump Executive Order Affects Federal Contractor Minimum Wage
On March 14, 2025, the president issued a new executive order (EO) entitled, “Additional Rescissions of Harmful Executive Orders and Actions.” This new executive order revokes EO 14026, issued by President Biden, which raised the minimum wage to $17.75 (effective January 1, 2025) for government contracts entered into after January 30, 2022 (including all renewals, extensions, and options). Some older contracts still operate under an Obama-issued executive order, EO 13658, which implemented a federal minimum wage that adjusts annually (currently it is $13.30, effective January 1, 2025).
In light of the revocation of EO 14026, we expect the Department of Labor (DOL) to issue a rule formally revoking EO 14026. The DOL also is not likely to enforce the higher federal minimum wage requirements of EO 14026. Practically, the revocation of EO 13658 means that EO 13838 (issued by President Trump during his first term) now becomes effective again. This means that the minimum wage requirements of EO 13658 are reinstated, and federal contractors with contracts entered into before January 30, 2022, and contracts entered into after January 30, 2022, will now be required to pay $13.30 as a federal minimum wage.
Contractors with contracts that include the Federal Acquisition Regulation (FAR) clause imposing EO 14026 presumably are contractually obligated to pay at least $17.75 per hour, but this higher minimum wage will likely not be enforced by DOL, now that EO 14026 has been revoked. Also, state minimum wage laws could still apply.
Please contact your Foley & Lardner attorneys if you have any questions.
